Road construction short at least €100 million for next year

An already-open two-lane stretch of the Tallinn-Tartu Highway.
An already-open two-lane stretch of the Tallinn-Tartu Highway. Source: Olev Kenk/ERR

Road construction needs additional funding to the tune of at least €100 million next year, while the government is struggling to come up with the money. Minister of the Interior Lauri Läänemets believes that a banking tax could be the solution, while Minister of Economic Affairs Tiit Riisalo does not agree.

The infrastructure construction sector has been in a difficult situation for years, and because road construction mainly depends on public contracts, state budget talks constitute the sector's last hope. If the government fails to come up with sums needed, construction volumes will plummet, which could cost 2,000 jobs.

"Market volumes are set to fall by 80 percent over two years, and I can tell you that this will not leave a single road construction company unaffected and will also hit the transport sector, logistics, supervision, representatives of contracting parties and lab services," said Indrek Pappel, head of the Estonian Infra Construction Association (ESTICA).

Next year's state budget currently holds €150 million for road public roads, while this is not enough even to maintain the current network of highways.

Pappel said that additional funding of at least €100 million is needed.

Minister of Finance Mart Võrklaev (Reform) met with sector representatives last week but was not available for comment on Sunday.

Minister of the Interior Lauri Läänemets (SDE) said that additional resources could be found for road construction.

"Whether Estonia will allocate additional road construction funding and deliver the sector depends on whether we will be able to lay down a banking profits tax or not, because the budget currently does not have the money. /.../ We have three options; to tax people more, tax companies more or take money back from the banks," he said.

But Minister of Economic Affairs Tiit Riisalo (Eesti 200) was less optimistic as there are other areas where additional sums are needed.

"We won't get anywhere like this. As if we had a simple way to raise tax money and a single place where it's needed. As I've said before, we also need more money for ICT developments. As we all know, education investments are key if we look to the future. We are short on funding for the transition to teaching in Estonian and delivering our higher education from its currently difficult situation. We cannot adopt these kinds of one-off positions where we say that we can tax one thing and use the money to pay for another," Riisalo commented.

But if [construction material] factories are forced to close shop for a few years, it will be next to impossible to lure employees back to road construction. Layoffs began in the sector last year.

"My information suggests companies are laying off workers again, with similar news coming from Estonia in the last two weeks," Pappel said.


Follow ERR News on Facebook and Twitter and never miss an update!

Editor: Merili Nael, Marcus Turovski

Hea lugeja, näeme et kasutate vanemat brauseri versiooni või vähelevinud brauserit.

Parema ja terviklikuma kasutajakogemuse tagamiseks soovitame alla laadida uusim versioon mõnest meie toetatud brauserist: